Sixth Amendment To Loan And Security Agreement And Loan Increase Agreement - ATRION CORP - 11-2-2011

Document Sample
Sixth Amendment To Loan And Security Agreement And Loan Increase Agreement - ATRION CORP - 11-2-2011 Powered By Docstoc
					                                                                                                     Exhibit 10.8
                                       
     SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND LOAN INCREASE
                                AGREEMENT
  
        THIS SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND LOAN
INCREASE AGREEMENT (this " Agreement "), dated as of the _ 1st __ day of October, 2011 (the "
Effective Date ") is between and among ATRION CORPORATION, a Delaware corporation, ATRION
MEDICAL PRODUCTS, INC., a Delaware corporation, HALKEY-ROBERTS CORPORATION, a
Delaware corporation,   QUEST MEDICAL, INC., a Texas corporation, ALATENN PIPELINE
COMPANY, LLC, an Alabama limited liability company, and ATRION LEASING COMPANY, LLC, an
Alabama limited liability company (collectively, the " Borrowers "), and WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association, successor by merger to Wachovia Bank,
National Association (the " Lender ").
  
                                         RECITALS:

        A.           Lender has heretofore established a Credit Facility for the Borrowers' benefit in the maximum 
principal sum of Twenty-Five Million Dollars ($25,000,000), which is evidenced and secured by the following:
  
        ·          Loan and Security Agreement dated November 12, 1999, as amended by Amendment to Loan
                   and Security Agreement dated as of December 26, 2001, by  Second Amendment to Loan and
                   Security Agreement dated November 7, 2003, by Third Amendment to Loan and Security
                   Agreement dated September 1, 2005, by Fourth Amendment to Loan and Security Agreement
                   dated July 1, 2008; and by Fifth Amendment to Loan and Security Agreement dated September
                   30, 2008 (as amended, the " Loan Agreement "); and
  
        ·          Line of Credit Promissory Note dated November 12, 1999 in the original stated principal amount
                   of $18,500,000, as amended by Note Extension Agreement dated August 31, 2001, by Second
                   Amendment to Line of Credit Promissory Note dated December 26, 2001 (which such Second
                   Amendment, among other things, increased the principal balance of the Line of Credit Note to
                   $25,000,000), by Third Amendment to Line of Credit Promissory Note dated November 7,
                   2003, by Fourth Amendment to Line of Credit Promissory Note dated September 1, 2005, and
                   by Fifth Amendment to Line of Credit Promissory Note dated July 1, 2008 (as amended, the "
                   Line of Credit Note "), evidencing the Line of Credit Loan portion of the Credit Facility.
  
        B.           The Credit Facility terminates on the Termination Date of November 12, 2012, and the 
outstanding principal balance of all Advances, together with accrued and unpaid interest thereon, is due and
payable in full on the Termination Date of November 12, 2012.
  
        C.           Borrowers have requested (1) that the principal amount of the Line of Credit Loan be 
increased from $25,000,000 to $40,000,000, (2) that the Termination Date be extended until October 1, 2016,
and (3) that the minimum Consolidated Tangible Net Worth Requirement be eliminated and Lender has so
agreed on the terms set forth below.
  
  
                                                          
                                                                                                               
  
        NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
herein contained, Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
  
        Defined Terms.   Capitalized terms used in this Agreement without definition shall have the 
meanings ascribed to them in the Loan Agreement.
  
        Line of Credit Loan Increased.   The Loan Agreement is hereby further modified and amended 
to increase the maximum principal amount of the Line of Credit Loan from $25,000,000 to
$40,000,000.  Accordingly, all references in the Loan Agreement to  the "Credit Facility," or the "Line 
of Credit Loan" shall henceforth refer to a Credit Facility and a Line of Credit Loan in the maximum
principal amount of $40,000,000.  Accordingly, the words and figures "Twenty-Five Million Dollars
($25,000,000)" or "$25,000,000" are hereby deleted in their entirety wherever the same appear and
replaced with the words and figures "Forty Million Dollars ($40,000,000)" or "$40,000,000" (as
applicable).
  
        Termination Date Extended . The Loan Agreement is hereby modified and amended to extend
the Termination Date from November 12, 2012 until October 1, 2016 by deleting in its entirety the
Defined Term "Termination Date" as the same appears in Section 1.1 of the Loan Agreement, and by
inserting in lieu thereof the following:
  
                "Termination Date" means October 1, 2016, or such earlier date on which the
        obligations of the Lender to make Advances hereunder are terminated pursuant to the terms of
        this Agreement.
  
        Pricing Matrix .  The Pricing Matrix attached as Exhibit A is hereby deleted in its entirety, and
the Revised Exhibit A which is attached hereto is inserted in lieu thereof.
  
        Changes in Financial Covenants .  Section 5.17 is hereby modified and amended to delete 
subsection 5.17 (b), which required the Group to achieve and maintain a minimum Consolidated
Tangible Net Worth requirement as set forth in the Loan Agreement.  A form of Revised Compliance 
Certificate is attached hereto as Exhibit G which shall replace the form Compliance Certificate
attached as Exhibit G to the Loan Agreement.
  
        Acquisitions .  In consideration of this Agreement, Borrowers hereby covenant and agree that 
at no time prior to the Termination Date shall Borrowers (or any of them) purchase all or substantially
all of the assets of any entity or any division of any entity or any operating line of business of any
entity or the equity interest of any entity unless at such time there is no Event of Default and, after
giving effect to such transaction, no Event of Default would exist on pro forma basis under the terms of
the Loan Agreement.
  
        Additional Indebtedness . In consideration of this Agreement, Borrowers hereby covenant and
agree that at no time prior to the Termination Date shall Borrowers (or any of them) incur or permit to
exist any Indebtedness (as hereafter defined) unless at such time there is no Event of Default or, after
giving effect to such Indebtedness, no Event of Default would exist on pro forma basis under the terms
of the Loan Agreement.  Indebtedness”  shall mean all liabilities of a Person as determined under
GAAP and all obligations which such Person has guaranteed or endorsed or is otherwise secondarily or
jointly liable for, and shall include, without limitation, (a) all obligations for borrowed money or
purchased assets; (b) obligations secured by assets whether or not any personal liability exists; (c) the
capitalized amount of any capital or finance lease obligations; (d) the unfunded portion of pension or
benefit plans or other similar liabilities; (e) obligations as a general partner; (f) contingent obligations
pursuant to guaranties, endorsements, letters of credit and other secondary liabilities; (g) obligations
for deposits; and (h) obligations under Financial Contracts
  
  
                                                         
                                                                                                      
  
        Sanctioned Persons; Sanctioned Countries .  Borrowers hereby represent and warrant that 
none of the Borrowers, their Subsidiaries or Affiliates or any guarantor (a) is a Sanctioned Person or
(b) does business in a Sanctioned Country or with a Sanctioned Person in violation of the economic
sanctions of the United States administered by OFAC.  Borrowers will not use the proceeds of any 
extension of credit under the Loan Agreement to fund any operation in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned Country.  As used herein, 
the term “ Sanctioned Country ” means a country subject to the sanctions program identified on the
list maintained by OFAC and available at the following website or as otherwise published from time to
time:   http://www.treas.gov/offices/enforcement/ofac/programs/ ; the term “  Sanctioned Person ” 
means a) any Person named on the list of Specially Designated Nationals or Blocked Persons
maintained by OFAC available at http://www.treas.gov/offices/eotffc/ofac/sdn/index.html o r a s
otherwise published from time to time, (b) any agency, authority, or subdivision of the government of a
Sanctioned Country, (c) any Person or organization controlled by a Sanctioned Country, or (d) any
Person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by
OFAC; and the term “OFAC”” means the United States Department of the Treasury’s Office of
Foreign Assets Control or any successor thereto.
  
        Notices. Section 8.6 is hereby modified and amended to change the address of Lender as
follows:
  
                 Wells Fargo Bank, National Association
                 4975 Preston Park Blvd.
                 Suite 280
                 Plano, Texas  75093 

        Amendment to Line of Credit Note .  Contemporaneously herewith, Borrowers and Lender 
have entered into that certain Sixth Amendment to Line of Credit Promissory Note and Loan Increase
pursuant to which the principal amount of the Line of Credit Note has been increased to $40,000,000
and the Termination Date set forth in the Line of Credit Note has been extended to October 1,
2016.  All references in the Loan Agreement to the "Line of Credit Note" shall henceforth refer to the 
Line of Credit Note, as amended by the Sixth Amendment to Line of Credit Promissory Note.
  
        Confirmation of Obligations .  Except as herein modified, the Loan Agreement shall remain in 
full force and effect, and the Loan Agreement is hereby ratified and affirmed in all respects.
  
  
                                                     
                                                                                                         
  
        No Novation and No Release of Collateral .  The execution and delivery of this Agreement 
shall not be interpreted or construed as, and in fact does not constitute, a novation, payment, or
satisfaction of all or any portion of the Loan Agreement; rather, this Agreement is strictly amendatory
in nature.  The execution, delivery, and performance of this Agreement shall not operate to release 
any Collateral securing the Credit Facility nor modify or otherwise affect the lien and security interest
held by Lender in and to such Collateral.
  
        Counterparts .  This Agreement may be executed in multiple counterparts and using multiple 
signature pages and shall be binding and enforceable at such time as each party has executed a
counterpart of this Agreement.  The signature of any party to a counterpart of this Agreement shall 
bind such party to the same extent as if all parties executed a single original hereof.
  
        Interpretation .  No provision of this Agreement shall be construed against or interpreted to the 
disadvantage of any party to this Agreement by any court or other governmental or judicial authority
by reason of such party's having or being deemed to have structured or dictated such provision.
  
        Integration .  Borrowers acknowledge and agree that no promises, agreements, 
understandings, or commitments of any nature whatsoever have been made by or on behalf of Lender
in respect to the Credit Facility and the Loan Agreement, except as set forth herein.  Specifically, 
Borrowers acknowledge and agree that Lender has made no agreement, and is in no way obligated, to
grant any extension, indulgence, forbearance, or consent with respect to the Credit Facility or any
matter relating to the Credit Facility, except as specifically set forth herein.
  
        Release of Lender .  In consideration of Lender's execution of this Agreement, and without any 
contingency, precondition, or condition subsequent, the Borrowers, for and on behalf of themselves
and all those claiming by, through or under them, including, without limitation, their respective heirs,
administrators, executors, beneficiaries, parents, subsidiaries, affiliates, owners, successors and
assigns, do hereby fully and forever remise, release, relinquish, discharge, settle and compromise any
and all claims, cross-claims, counterclaims, causes, damages and actions of every kind and character,
and all suits, costs, damages, expenses, compensation and liabilities of every kind, character and
description, whether direct or indirect, known or unknown, in law or in equity, which any of them now
have or will have against Lender, and/or any of its affiliates, agents, representatives, officers,
employees, attorneys, advisors, consultants or contractors on account of, arising  out of, or resulting 
from, or in any manner incidental or related to the Loan Documents, the Collateral, Lender’s
administration of the Loan Documents or the Collateral, this Agreement, or any other transaction
contemplated by this Agreement that occurred or failed to occur at any time in the past up to and
including the Effective Date.
  
        Severability .  If any provisions of this Agreement or the application thereof to any person or 
circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the
application of such provisions to other persons or circumstances shall not be affected thereby and shall
be enforced to the greatest extent permitted by law.
  
  
                                                      
                                                                                
  
      Waiver of Jury Trial .  BORROWERS HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY 
ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION
ARISING OUT OF OR IN ANY WAY PERTAINING OR RELATED TO LOAN OBLIGATION,
THIS AGREEMENT, OR ANY OTHER LOAN DOCUMENT, OR IN ANY WAY CONNECTED
WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF
LENDER AND BORROWERS WITH RESPECT TO THE LOAN OBLIGATIONS, THIS
AGREEMENT, AND ANY OTHER LOAN DOCUMENT, OR IN CONNECTION WITH THE
TRANSACTIONS RELATED HERETO OR CONTEMPLATED HEREBY OR THE EXERCISE OF
ANY PARTY'S RIGHTS AND REMEDIES WITH RESPECT TO THE LOAN OBLIGATIONS,
THIS AGREEMENT, OR OTHERWISE, OR THE CONDUCT OF THE RELATIONSHIP OF THE
PARTIES HERETO, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE.  BORROWERS ACKNOWLEDGE THAT LENDER MAY FILE A COPY OF THIS 
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY, AND BARGAINED AGREEMENT OF THE BORROWERS IRREVOCABLY TO
WAIVE THEIR RIGHTS TO TRIAL BY JURY, AND THAT, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN
BORROWERS AND LENDER SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
  
                                 [Signatures on Following Pages]
  
  
  
  
  
  
                                         
                                                                                              
  
         IN WITNESS WHEREOF, Borrowers and Lender have caused this Agreement to be executed by
their respective duly authorized officers as of the date first above written.
  
                                                             BORROWERS:
                                                               
                                                             ATRION CORPORATION,  
                                                                
                                                             a Delaware corporation
                                                               
                                                             By:  /s/ Jeffery Strickland
                                                                 Jeffery Strickland
                                                                 Its Vice President
                                                               
                                                               
                                                             ATRION MEDICAL PRODUCTS, INC.,
                                                             a Delaware corporation
                                                               
                                                             By:  /s/ Jeffery Strickland
                                                                 Jeffery Strickland
                                                                 Its Vice President
  
  
                                                             HALKEY-ROBERTS CORPORATION,
                                                             a Delaware corporation
                                                               
                                                               
                                                             By:  /s/ Jeffery Strickland
                                                                 Jeffery Strickland
                                                                 Its Vice President
                                                               

                                              QUEST MEDICAL, INC.,
                                              a Texas corporation
                                                
                                                
                                              By: /s/ Jeffery Strickland
                                                  Jeffery Strickland
                                                  Its Vice President

  
                                              ALATENN PIPELINE COMPANY, LLC,
                                              an Alabama limited liability company
                                                
                                                
                                              By:  /s/ Jeffery Strickland
                                                  Jeffery Strickland
                                                  Its Vice President
  
  
                                                
                                             
  
     ATRION LEASING COMPANY, LLC,
     an Alabama limited liability company
       
       
     By:  /s/ Jeffery Strickland
         Jeffery Strickland
         Its Vice President
  
     LENDER:
       
     WACHOVIA BANK, NATIONAL
     ASSOCIATION,
     a national banking association
       
       
     By:    /s/ W. R. Birdwell
     Title: S.V.P.

  
  
       
                                                                                                                
  
                                          REVISED EXHIBIT A
                                            PRICING MATRIX
                                      (Effective October __ 1 __, 2011)
  
If the ratio of Consolidated The Line of Credit         The Unused Line            The Term Loan
Total                        Loan Margin                Fee Will Be:               Margin Will Be:
Liabilities/Consolidated
Tangible Net Worth is:       Will Be:                                                
Greater than 2.00            200 bps (2.00%)            6.5 bps (.065%)            225 bps (2.25%)
1.51 to 2.00                 150 bps (1.50%)            6.5 bps (.065%)            175 bps (1.75%)
1.15 to 1.50                 125 bps (1.25%)            6.5 bps (.065%)            150 bps (1.50%)
Less than 1.15               100 bps (1.00%)            6.5 bps (.065%)            125 bps (1.25%)
  
*NOTE: The changes reflected in the above-Pricing Matrix also apply to the Pricing Matrix attached as Exhibit
A to the Line of the Credit Note which is attached as Exhibit B to the Loan Agreement, and to the Pricing Matrix
attached as Exhibit A to the Term Note which is attached as Exhibit D to the Loan Agreement.